Layoffs in the Bakken and a shifting economy

January 24, 2015

Zach Koppang | Energy Media Group

As the oil price slump persists consumers are reaping the benefits of lower fuel costs. Towns like Williston, however, with economies structured around the oil and gas industry, are beginning to see the effects of the nation-wide drilling slowdown.

A recent report from CNN Money examines how the slowdown is beginning to affect workers in the Bakken oil formation of Montana and North Dakota. Across the nation, oil and gas companies have been announcing layoffs. Schlumberger, the world’s largest oilfield services company, reported that it would cut 9,000 jobs companywide. Earlier this week, Baker Hughes announced the layoffs of about 7,000 employees by the end of March.

The rig count in North Dakota has dropped significantly within the past month and has reached the lowest level in five years. As of today, the rig count is 157 compared to 189 the same time last year. CNN reports that CEO of MBI Energy Services Jim Arthaud said, “My prediction is we’re down to 50 rigs by June.” Though, he didn’t express much concern about the effects it would have on his company. The firm repairs area oil field equipment, works to increase well flow and transports oil from the fields to adjacent rail hubs.

Arthaud, who grew up in North Dakota, has been working in the oil and gas industry since the late 1970s. Having experienced the industry’s cyclical nature before, he plans to use the layoffs from other companies as an opportunity to hire additional employees. The Belfield-based company currently employs roughly 2,000 people. The effects of the drilling slowdown will likely have a large impact on the region if low oil prices persist, however. Arthaud commented, “I’d say we’ll lose 20,000 jobs by June.”

Despite the current slowdown, other residents don’t seem as concerned. While the drilling slowdown may lead to layoffs in the oil and gas sector, the region continues to sustain its population and retains the need for infrastructure related to the industry. CNN reports that Josslyn Dodds, an owner of a local pharmacy said, “I hear about people getting laid off, but there are still so many people everywhere. There are so many people who have made this place their home.”

In Watford City, for example, Mayor Brent Sanford stated that when his daughter was born in 2000, there were only three other children born in the county that same year. Today, there are about 90 kids in her class. He said, “Half the students are living in RVs.” Housing developments continue to spring up at an exponential rate, and the city is in the process of building a new high school, hospital and events center to remedy the rapid population growth. Although many are concerned about what will happen if the oil boom turns bust, the region continues to hire in other industries.

In Williston, Mayor Howard Klug said, “I’m not worried, because it’s going to come back.” He added that if the oil boom dries up, there are plenty of other industries to be a buoy for the slowing pace of the oil and gas industry. He said the city is looking to refining, tourism, or even returning to the area’s agricultural roots if the oil dries up. Though, he doesn’t see that happening anytime soon.

I am really sorry that you are laid off and that you and your family are in your situation. However, I do have to say that my sympathy is pretty small considering how badly the oil and gas majors stuck it to all of us consumers the last 14 years (with a short reprieve in 2009-2010). And of course, they will start shutting off the wells, letting it dry up some, and then run the price stupidly high again.

Were you working in the Oil Industry?? If so I am sorry for your loss however If you have been bringing home six figures and didnt save anything I guess it’s on you. Yes I love low priceses at the pump!! If the oil giants werent screwing us all so bad and we werent all being screwed by the price to just get the oil out of the ground and paying off the farmers ranchers and land ownes gas would be one dollar a gallon. The price of oil will go up again you will get that job back and we will all be paying 4 bucks a gallon for gas making it on a regular wage and you will be making to much money while the rest of us figure it out…. Is that better for you and your family??

I don’t think anyone is panicking except the news media. I’ve been hearing about thousands of layoffs, but I’m yet to personally know anyone who’s been laid off!! I mean, it’s not like oil prices have never dropped before….it’s just a matter of time before the gas pumps become unfriendly once again!!

Lot of folks got laid off and more coming. Rig count in the Bakken down to 156. A very good friend who works on them told me that his company is planning to lay down at least 40 percent of their rigs if not more. Hot stacking for now but soon cold stacking if the prices don’t come up. When they get laid off they just up and leave heading to where ever home is

Butch Thorton…….Really. You know Families still have Bills due every month, meidcal bills, Heating costs, House Payments etc. My husband works his Ass off & misses out on so much every year with our kids & our family…..We set money aside but dont have millions in the bank. People need to seriously think about what they say. There is some Stupid Misconception about Oilfeild famies & what they do with there money. My husband is in this to make a living & support our family & not live paycheck to paycheck.

lets be perfectly real. You are stupid if you think you can take up a career in oil and think it’s going to be stable. Those are jobs, not careers. The other thing is the people working there are making a good living and get themselves into a financial situation that is not sustainable. Guess what. Your stay at home wifey might have to get a job and you might have to sell some of the toys you bought while the money was good. Be smart people!

oil and gas workers don’t make big money. We are compensated for the long hours and days away from family. We also still pay full price for the same stuff everyone else does. Most guys make 13-18 an hour but work 12+ hours a day with no days off. I know 7-11 pays 12.50 in okc so the difference is in the amount of hours and days on. We aren’t all millionaires out here swinging a hammer and making connections.

My husband got laid off on December 3. All these people that are excited about low gas prices should expect a rise in the price of everything else. The money will not be as free flowing as it has been and there will be a trickle down effect on other businesses, which will also go out of business, because there won’t be as much money being spent. Good luck. Hope you like the low gas prices. Oh, by the way, the price of propane is not going down, so will you afford to heat your home? Just my thoughts.

I just want to know when housing prices will drop. If they think people made that their home, they are right however, no one can afford housing there without the oilfield money. People in leases are going to be hurting

Usually housing/Apartment prices won’t drop until way after the boom is nusted. The owners want to keep their income level the same plus they owe the banks and sadly bankruptcy and foreclosures are next in a big way

I don’t live there but we would like to move there. I would think with all the lay offs people would be moving out leaving the owners with no choice but to lower the rent just to keep them occupied. But I have no idea. It’s all new to me 🙂

When it goes fully bust in a couple of months, the cost of housing will drop dramatically and there will be a lot of bankruptcies and foreclosures. Wages will also severely drop. When there isn’t an oil boom most jobs here are minimum wage or a little higher than that.

It is a great place to live. I don’t know how long it will take out of state investors to lower prices or get foreclosed on. Those in houses may suffer first. 12 yrs ago my daughters worked in “ordinary ” jobs, worked extra hours and took cruises every year.

Not this exact story, but there has been a couple different stories on this topic posted recently. Since this is such an important issue for the industry, we want to keep our audience up to date on this topic.

I think what people want to see are actual facts. There seems to be so many mixed stories out there that nobody knows what to believe. I think fact findings are relevant before posting news like this. Alot of oil field workers seem to know a bit more cause they are actually out in the field so I will tend to listen to them a bit more than a newspaper article without actual facts. This is only my opinion.

Thank you so much for your opinion Michael – could you please specify where there are incorrect facts in this article so we can address them? We appreciate all feedback from our audience with serious consideration.

I’ve been reading alot about layoffs but it seems the workers have yet to see these layoffs, so I would find out specifically where the layoffs are at and start there. Maybe talk to the workers and companies.

Great points Michael – we have had countless followers state that they have been recently laid to either us directly or as a comment on articles that we post. We also reach out to the O&G industry to ask about their current situations and have had a lot of feedback that there has been several layoffs happening to them or individuals that they know.

You previously stated that “I think fact findings are relevant before posting news like this.” We would really appreciate knowing specifically what information was false. Our articles go through several editing and fact finding stages before they are posted.

If you are trying to stay up here during this seasonal slow down, it helps to have an in on the service side of things, yes it’s less pay, but you won’t starve. Now is the time to jump on it bc come Feb and March most spots will be filled.

Same thing happened in the 90’s and in 2008.
I use the term seasonal loosely, I know it’s going to be slow the next year or two, my point is that it helps to know the service side of things and to have an out from the drilling side.
I saw this coming 6 moths ago, I went from hauling to to rigs and frack sites to reclaiming old pads, we have over 70 sites under contract, that’s enough work to last a year, it’s a big pay cut, but it’s stable .

Bill Rucker>> It makes a lot of sense. You have no clue how much our hard earned oilfield money supports all the businesses in and around the oilfield. If the oilfield goes down so does all the new hotels, shopping centers, restaurants etc. that open up shop around us to get in on the money. You have no clue how widespread the effect will be. All of America will feel the effects.

You save a few dollars at the pump. big Deal. They say average someone will save $700 a year if the gas stays at this price. While these guys that have lost their income will be loosing so much more then that. You figure there montly salary & multiply it by 12…….I think we can see who will be getting screwed. There could be a happy Medium.

Only a small percentage of the Cities or towns in the US have an economy that depends on the oil industry. I come from a mining town and your situation is no different. That is what happens when prices fall.

Billy the problem is that when the bust in the 80s happened, people still had good options for work, logging, mining and so on. Those jobs are gone and have been replaced with low paying jobs. I live 600 miles from an oilfield and 7% of the 115k people in my county work in either the bakken or Wyoming oil patches, if we all lose our oil jobs that puts our non oil community at about 14% unemployment, or employment that doesn’t pay a quarter of what we we’re making. It’s roughly a half a billion dollars a year that won’t be brought into and spent in my non oil community. That’s how it hits America hard.

Tuff titties said the kitty…..Booo hoo if a few jobs are lost to keep prices low so the rest of the American people don’t go broke just paying for fuel to get back & forth to work….like it has been for years!

Most of us that are being laid off pay about $750 TO $1250 A week in taxes that go to pay for things like food stamps, earned income tax credit, WIC, and a lot of other things you as young father benefit from……. oh and let’s not forget section 8 housing for those down in the warm South. Yep us guys living in campers in below 0 weather are paying for that too….

Hey brother half my pay is gone every pay as well! I make damn good money in my position doing telecommunications in the Healthcare industry. Because my work is inside and yours is outside doesn’t change a thing. I could still be out running the east coast chasing troubles and doing line work (I am a BICSU certified technician with a IT degree that I paid for by myself because I worked full-time), but I chose to be home after becoming a dad…landed an excellent telecommunications position for a very large Healthcare facility. So what exactly do you give me a month? WHAT DO YOU PROVIDE FOR MY FAMILY? Was all that money in my bank account that built my families home your money I’ve been saving all these years? And it’s not my fault you work out in the weather and live in a camper…..cry me a river! I was out working 30ft up a telephone pole with spikes and a leather belt in ZERO temps and splicing cable. You don’t like it get a different career then. I also only work 40hrs a week. I don’t care about down south and section 8 9 or 10. Or if you was multi skilled you’d be prepared with a backup career plan to provide for yourself incase something didn’t work out. If anything my check will be paying your laid off ass….

You willl save a few Dollars at the pump……The amount of money you will be saving is ridiculous to the amount of money these oilfield families will be loosing. I have a great idea if you Seriously cant afford gas look for a better job.

Not as easy as it sounds. When you’re making almost 100k a year in the oilfield and get laid off- the oilfield isn’t hiring. Where else can you find a job that you work that many hours and make that much money?! Not many places. And with the amount of people laid off, the jobs that are hiring have a lot of competition.

Tina Mccafferty most working people are “utterly dependent” on their jobs to feed their family and provide. My husband stays away from home for months at a time and every dime he makes goes to mortgage the 1 “new” used vehicle that we have (the 1st 1 either of us have owned with less than 250k miles on it in 10+ years). I work full time. We live way below our means feed our children tithe to our church. What makes us any different than any other working family?? The pay?? I’d like to see some of these people that say that spend months away from home working 14-16 hours a day with no weekends and no family around no body to go home to go and do the same job for 1/2 price and then tell us exactly what they think the sacrifice they make is valued at!! Most of us oil field people don’t flaunt “the big money” we tuck it away with certain goals in mind to better our families future!! It’s better than sitting around collecting welfare with a “utterly dependent” entitlement attitude.

WOW another iggnorant person not thinking before they speak. Finding another job that is equivalant to the oilfield isnt that easy! No one wants to live paycheck to paycheck. And just because they are laid off how do you know they arent Looking for another job! Have some compassion for these guys that have busted their ass for years, to support their family Not to go into debt & to Sacrafice so much.

This is my third slow down that I have been involved in. It’s tough, I have learned to live on 40k a year so anything after that is placed in savings just in case. I actually learned that from a company man who has been in the industry for 35 years!

As for you you’re a POS in my opinion. People dedicated their lives to a particular field of work only to have a low life like you tell them to get a new job who in the world do you think you are anyway? It’s not that easy some have spent more blood sweat and tears than you’d ever dream of on this field of work not to have it taken out from under them every time the market crashes!
I just pray this doesn’t happen to you cuz you don’t deserve the concern of others if it does!

Right- like they’re going to “catch up with the housing, when their source of revenue to invest just flew out the window. Think they’re going to trust that “Decades of prosperity through fracking” line again??

Maybe some of you should think about oil and gas it doesn’t just produce oil and gas ,what about all the luxeries around and in your home and those tires that is on that car that you are putting that cheap gas in,ignorance to what is all made from this maybe why a lot of you feel the way you do!!!!As an oilfield wife we support any state we work in and by that I mean forking out a lot of money rent ,utilities,fun and games,food,tips which is building up your community!!!

Oh don’t worry i don’t entertain people like that,I know what makes the world go round and I bet she’s fueling her car right now or maybe she has a wooden wheel bicycle ,ignorance of the oil industry is in so many people it’s sad!!! Especially when they are using products made from it every day !!!!!!

It’s not a lack of oil jake. It’s a surplus because opec won’t slow their production to meet the demand. If you don’t think the oil and gas industry effects you just wait a year and see what happens if prices don’t go up. 25% of the workforce has already been laid off so that will create a drain on unemployment and welfare. Which cost you tax money.

My business is making an extra 2k per month because of low gas prices . So you’re right it is effecting me and the majority of the U.S. In a positive way . The oil and gas industry doesn’t even employ 1% of the US population .

Don’t think we would trade our oil jobs for any of those jobs been in oil and gas for 43 years and we not about to change now!!!!Just pisses oil workers off when others try to down what we do ,but use the products we work so hard for everyday on a daily basis and they don’t even realize this ,are they really that ignorant that they believe we only get gas and oil out of what we do haha what a joke ,google people see what you use every day of your life and see if you can do without just half of the items!!! Then comment ….. Now school on that thought!!!

This is actually good for the industry in the long run. Alternatives will lose all kinds of ground. Why invest in renewables when oil is so cheap? SUV sales are already up as stupid Americans drink the cheap, addictive Kool-Aid. They are just insuring their customer base for the next cycle. Oil companies are just pushers. Got keep me addicted!

Sure I’ll be back but not by choice. Over the last 25 years, the average price of oil is 50/bbl. the average break even for ND is 70-80/bbl. therefore ND has unsustainable production with locals who don’t want us there anyway. The economics are simply not there and a majority the general attitude in ND against O&G will deserve what they are about to not get. My opinion. And I still work there by the way.

I’m second generation oilfield trash and been in the business all my life. You are not 100% accurate with regard to how people are treated in ND and their price gouging. Been all over the world and all over the states. The only place I have worked similar to ND is Pinedale WY. I treat people how I am treated and for rudeness, price gouging etc. ND is by far number one. Yes I will go elsewhere for these reasons and also for the simple reason devaluation of oil which in my opinion will never recover in ND the avg price for the last 25yrs is $50 far below ND break even of $70-80 so as all these independents go belly up, count on middle eastern oil companies and major oil companies to snatch them up for salvage. A boom based on a false economy with people who never wanted us there anyway. I’m always grateful to have a job but not because ND provided me one its because I earned my title and position which simply takes me where the action is.

Most of us that are being laid off pay about $750 TO $1250 A week in taxes that go to pay for things like food stamps, earned income tax credit, WIC, oh and let’s not forget section 8 housing for those down in the warm South. Yep us guys living in campers in below 0 weather are paying for that too….

Yes my husband is looking for a job now that he has been laid off. But my husband has spent his entire adult life in the oilfields. Much easier said then done. But we thank you for your words of wisdom. Plus we are in California. Not much water projects out here with a 5 year drought.

Solar /hydro powered electric car and biodiesel for my truck . Unfortunately it’s not perfect , everything uses resources , even the bunch of bananas I might need to pedal my bike . I could only reduce my carbon footprint by 90+%. It’s a start, hard monkey to get off ones back , but each global citizens’ responsibility to do so.

Not to mention the internet, the computer or phone you use, etc. Between rubber, plastics, roadways, etc, you’d have to go live on an island to not be supporting oil in some way. Even your bike is made with oil in some part of the process. Killing the planet…lol. yeah, okay. Does nobody realize we only go about 2 miles down at the deepest wells before going horizontal?? Hmmmm… figure that against the diameter of the Earth… Or perhaps everybody knows HOW wells are built, drilled, completed and fracked? Of course not, everybody thinks we just drill holes and rape the Earth hoping for a return. Nothing could be further from reality.

solar wind hydro will also take an initial use of petrol and mined materials to get built. just as the dam projects of the early century did, but the yield in green energy far out weighs the damage. It’s not like this is debatable anyway, the science is in and the environment is in peril. This could be our waterloo if we don’t play it right.

Solar never makes money. Wind mills break down before they pay for them selves. Not to mention it takes more energy to make them than they will ever produce. Both wouldn’t exit if the government didn’t subsidize them and mandate that we have to use them first before generating by other means.

No, when we stop using fossil fuels as our main energy source, then foreign countries won’t be able to jerk us around any more. Permanent energy self-sufficiency through efficiency, waste reduction and alternatives is the answer.

No business goes into businesses to lose money. They will not drill if they cannot do so profitability. That said, all these companies are using new tech all the time to become more productive and profitable at lower prices.

Overpaid people??? Lol, you obviously have never been in the oilfield and have zero clue. Many of them work their Asses off. I agree there are some that are overpaid, but many work very hard to earn every dollar. Dont be a hater cause someone can stand the work and you cant.

Christopher Zietler I to have done roofing and concrete and also have been involved in oil field how many roofs have you done in 40 below zero weather how much concrete have you poured in the middle of the night in in rain snow or sleet for 2 weeks straight its not as easy as you may think I welcome you to try it then tell me they are over paid the problem with this world is ignorance and people talking out about stuff they know nothing about!

An oilfield man works harder, longer and farther from home than 95% of you regular suckers. You better hope prices come back cuz when they do look for work they are gonna be taking your job. How bout them apples!!!

For all those of you who think you know so much how about this how about you look up what all uses oil and how our oil prices affect effect everyone not just those working in the business. Look at how good costs have gone up due to oil prices going down. Why don’t you look at what happened back in ’81-’82. I know prices will go back up and then everyone will complain about them being so high but it’ll even out with everything else.
Oh as for not knowing anyone personally whose been laid off my husband is one of those people been 5 1/2 weeks and I know over 100 who have lost their jobs!
Stop thinking only of yourselves just because it doesn’t affect you directly because at some point it will because when a state loses revenue they make up for it with the amount you get back on state tax returns so it will eventually affect you at some point just not as hard as it does those in the field!

Some of the largest city’s in the country were just boom towns at one point. Some of these people on here are ridiculous. It’s pretty hilarious. If ignorance is bliss these people are happy happy happy.

Just wait til OPEC controls oil without US oil companies in business, then you’ll wonder where the oilfield hands are with $5 gas. That’s why they are trying to break oil production on US Land so they can really put it on us. But that’s none of my business … #oilfield raised and oilfield paid.

It will be back up in a few months, $55-$65 would help a lot, some fields would struggle but we need a balance. Saudi is trying to destroy our production capabilities. I’m worried that Russia may start something to drive prices back up, they are dying over there.

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